01—Abstract
Summary
Summary of the 8-K filed August 20, 2026. Cited figures are marked; the original filing is the authoritative source.
Walmart reported second-quarter fiscal 2027 results (three months ended July 31, 2026) with revenue of $187.9 billiona, up 5.9% (5.1% in constant currency), and operating income of $9.4 billion, up 28.8% reported and 17.4% on an adjusted constant-currency basis.
GAAP EPS was $0.80b, down 9.1% year over year, while adjusted EPS rose 19.1% to $0.81. Management attributes the strong profit growth largely to tariff refunds received in the quarter, which are being partly reinvested into price, so investors are advised to look at Q2 and Q3 together to judge underlying growth. The eCommerce business grew 23% globally, global advertising grew 38%, and membership fee revenue grew 17%, reflecting continued strength in the company's higher-margin growth drivers.
Walmart raised its fiscal 2027 outlook: constant-currency net sales growth is now expected at 4.0% to 5.0% (up from 3.5% to 4.5%), adjusted operating income growth at 7.0% to 8.5% (up from 6.0% to 8.0%), and adjusted EPS of $2.80 to $2.87c (up from $2.75 to $2.85). Q3 guidance calls for net sales growth of 3.0% to 3.75% and adjusted operating income growth of 2.0% to 4.0%, with a headwind of over 100 bps from a timing shift of Flipkart's Big Billion Days into Q4. Capital expenditures are now expected at approximately 4.0% of net sales, up from 3.5%, which is a meaningful change for free cash flow.
Balance sheet and cash flow show some pressure. Free cash flow for the six months fell $1.4 billion to $5.5 billiond as capital expenditures rose $2.8 billion, even though operating cash flow increased to $19.7 billion.
Total debt rose to $57.2 billion, inventory increased 6.7% to $61.6 billion, and Walmart repurchased $5.1 billion of stock year to date with $25.1 billion remaining on its authorization. Walmart U.S. comparable sales slowed to 2.6% ex-fuel, weighed by a roughly 125 bps headwind from pharmacy deflation tied to the maximum fair price regulation, so the top-line trend in the core U.S. business warrants monitoring.
02—Key points
Key Highlights
- Revenue rose 5.9% to $187.9 billion (5.1% in constant currency); net sales of $186.1 billion grew 5.9%.
- Reported operating income grew 28.8% to $9.4 billion, and adjusted operating income in constant currency grew 17.4%, both aided by tariff refunds that are being partly reinvested in price.
- GAAP EPS was $0.80, down 9.1%, due to a $1.2 billion other loss on equity investments; adjusted EPS rose 19.1% to $0.81.
- Fiscal 2027 guidance raised: net sales growth 4.0%-5.0% cc, adjusted operating income growth 7.0%-8.5% cc, adjusted EPS $2.80-$2.87, and capex now about 4.0% of net sales.
- Q3 guidance: net sales growth of 3.0%-3.75%, adjusted operating income growth of 2.0%-4.0%, and adjusted EPS of $0.62-$0.64, with a Flipkart timing headwind of over 100 bps.
- Free cash flow fell $1.4 billion to $5.5 billion for the six months as capex increased $2.8 billion to support omnichannel growth, while operating cash flow rose to $19.7 billion.
- Walmart U.S. comparable sales grew 2.6% ex-fuel versus 4.6% a year ago, with a roughly 125 bps pharmacy deflation headwind; eCommerce grew 23% globally and advertising grew 38%.
03—Questions
Frequently Asked Questions
Why did operating income jump 28.8% if underlying growth is more modest?
The reported increase was boosted by tariff refunds received in Q2. Management says it is reinvesting much of those refunds into price, so the net effect is smaller. Excluding the net impact, underlying operating income growth was at the top end of guidance. Management recommends evaluating Q2 and Q3 together to assess the business's underlying trend.
Why did GAAP EPS decline while adjusted EPS grew?
GAAP EPS fell to $0.80 from $0.88 because of a $1.2 billion other loss, mainly from a decline in the stock price of Walmart's Symbotic investment. Adjusted EPS excludes this fair-value change, net of tax, and also excludes a $0.11 benefit from a tax matter, producing adjusted EPS of $0.81, up 19.1%.
Is Walmart's guidance raise meaningful, and what offsets it?
The raise is modest but real: adjusted EPS guidance moved up by $0.05 at both ends for fiscal 2027, and sales and operating income ranges were lifted. The raise is partly tied to tariff refunds, which are not expected to recur indefinitely. Higher capex guidance of about 4.0% of net sales will weigh on free cash flow in the second half.
Why is free cash flow declining despite higher operating cash flow?
Operating cash flow rose $1.4 billion to $19.7 billion for the six months, but capital expenditures rose $2.8 billion to $14.2 billion as Walmart invests in its omnichannel strategy and automation. Free cash flow therefore fell to $5.5 billion from $6.9 billion. Capex is now guided higher for the full year.
What are the main risks to watch in the U.S. business?
Walmart U.S. comparable sales slowed to 2.6% ex-fuel from 4.6% a year earlier. About 125 bps of the slowdown reflects pharmacy deflation from the maximum fair price regulation effective January 1, 2026. Investors should watch whether underlying growth holds once the regulatory headwind and tariff-refund benefits fade, and whether rising inventory (up 6.7%) and higher debt ($57.2 billion) affect returns.
04—Continue